IN THE DEPARTMENT OF INSURANCE, FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION

STATE OF MISSOURI

In Re: ) )

OLD REPUBLIC INSURANCE COMPANY ) (NAIC #24147) )

Market Conduct Examination No. 1610-56-TGT

ORDER OF THE DIRECTOR

" NOW, on this £ day of January, 2017, Director, John M. Huff, after consideration and

review of the Stipulation of Settlement and Voluntary Forfeiture (hereinafter "Stipulation")

entered into by the Division of Insurance Market Regulation (hereinafter "Division") and Old

Republic Insurance Company (NAIC #24147) (hereinafter "Old Republic"), relating to the

market conduct examination set out in the caption above, does hereby issue the following orders:

This order, issued pursuant to §374.205.2(5) RSMo 2000, §374.280 RSMo (Cum. Supp.

2013) and §374.046.15. RSMo (Cum. Supp. 2013), is in the public interest.

IT IS THEREFORE ORDERED that Old Republic and the Division of Insurance Market

Regulation having agreed to the Stipulation, the Director does hereby approve and agree to the

Stipulation.

IT IS FURTHER ORDERED that Old Republic shall not engage in any of the violations

of law and regulations set forth in the Stipulation, shall implement procedures to place Old

Republic in full compliance with the requirements in the Stipulation, to maintain those corrective

actions at all times, and shall fully comply with all terms of the Stipulation.

IT IS FURTHER ORDERED that 91d Republic shall pay, and the Department of

Insurance, Financial Institutions and Professional Registration, State of Missouri, shall accept,

the Voluntary Forfeiture of $2,000 payable to the Missouri State School Fund.

IT IS SO ORDERED.

IN WITNESS WHEREOF, !,!1ave hereunto set my hand and affixed the seal ofmy office in Jefferson City, Missouri, this '31.s clay of January, 2017.

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bi Re:

IN THE DEPARTMENT OF INSURANCE, FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION

STATE OF MISSOURI

OLD REPUBLIC INSURANCE COMPANY (NAIC #24147)

) ) ) )

Market Conduct Examination No. 1610-56-TGT

STIPULATION OF SETTLEMENT AND VOLUNTARY FORFEITURE

It is hereby stipulated and agreed by the Division of Insurance Market Regulation

(hereinafter, the "Division"), and Old Republic Insurance Company (NAIC #24147) (hereinafter

"Old Republic"), as follows:

WHEREAS, the Division is a unit of the Missouri Department of Insurance, Financial

Institutions and Professional Registration (hereinafter, the "Department"), an agency of the State of

Missouri, created and established for administering and enforcing all laws in relation to insurance

companies doing business in the State in Missouri; and

WHEREAS, Old Republic has been granted a certificate of authority to transact the business

of insurance in the State of Missouri; and

WHEREAS, the Division called a Market Conduct Examination of Old Republic based upon

findings contained in a Market Conduct Investigation; and

WHEREAS, based on the Market Conduct Investigation the Division alleges that:

1. Old Republic failed to include a payment for sales tax in two insured commercial

automobile policy first party total loss settlements even though the company's policies provided for

payment of the sales tax in violation of§§ 375.445,1 375.936(13), 375.1007(1), and 375.1007(4),

RSMo, and 20 CSR 100-1.020(1)(A).

1 All references, unless otherwise noted, are to Revised Statutes of Missouri 2000, as amended.

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'\YHEREAS, the Division and Old Republic have agreed to resolve the issues raised in the

Market Conduct Examination and Market Conduct Investigation as follows:

A. Scope of Agreement. This Stipulation of Settlement and Voluntary Forfeiture

(hereinafter, "Stipulation") embodies the entire agreement and understanding of the signatories with

respect to the subject matter contained herein. The signatories hereby declare and represent that no

promise; inducement or agreement not herein expressed has been made, and acknowledge that the

terms and conditions of this agreement are contractual and not a mere recital.

B. Remedial Action. Old Republic agrees to take remedial action to ensure that it is in

compliance with the statutes and regulations of Missouri and agrees to maintain those remedial

actions at all times. Such remedial actions shall include, but are not limited to, the following:

1. Old Republic agrees that it will pay all first party automobile total loss claims,

including payment for all sales taxes relating to such claims, according to the terms of its policy

provisions and agrees to maintain this remedial action at all times2•

2. Old Republic agrees that it will review all first party automobile total loss claims paid

or processed at any time from January 10, 2012 to the date of the entry of the Final Order closing this

Market Conduct Examination to determine if Old Republic paid all applicable sales taxes to total

loss claimants for their damaged vehicles using the contractual value payable under the terms of each

policy at the time ofloss.3 If all applicable sales taxes were not paid by Old Republic to a claimant,

Old Republic shall pay restitution to the claimant in the amount of the sales tax payable under its

policy on the date ofloss, including all state, city, county and other sales taxes. Such restitution shall

2 Nothing in this Stipulation requires Old Republic to pay sales tax on insured vehicles that are exempt from payment of sales tax, provided Old Republic can document the exemption on the insured vehicle's title. 3 This could be Actual Cash Value, Stated Value or some other valuation method listed in the policy.

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be paid '"1th no reduction in the amount payable to the claimant if the owner of the total loss vehicle

retains the vehicle as salvage, unless there is a clear and specific provision in the policy supporting

the reduction. For purposes of this Stipulation, providing a claimant with a sales tax affidavit

pursuant to the provisions of§ 144.027 standing alone does not constitute payment of all applicable

sales taxes to the claimant.

C. Compliance. Old Republic agrees to file documentation with the Division, in a

format acceptable to the Division, within 120 days of the entry of a final order of any remedial action

taken to implement compliance with the terms of this Stipulation and to document payment of

restitution required under the terms of this Stipulation. The Division agrees that Old Republic's

presentation of a Missouri Certificate of Title for the insured vehicle stating "exempt" in the Tax

section of the Title is sufficient documentation to support a determination that no sales tax was owed

on such vehicle suffering a total loss claim.

D. Examination Fees. Old Republic agrees to pay any reasonable examination fees

. expended by the Division in conducting its review of the documentation provided by the Company

pursuant to Paragraph C of this Stipulation.

E. Non-Admission. Old Republic denies any wrongdoing or activity that violates any

applicable laws or regulations.

F. Voluntary Forfeiture. Old Republic agrees, voluntarily and knowingly, to surrender

and forfeit the sum of $2,000 such sum payable to the Missouri State School Fund, in accordance

with § 374.280.

G. Other Penalties. The Division agrees that it will not seek penalties against Old

Republic, other than those agreed to in this Stipulation, in connection with Market Conduct

Examination #1610-56-TGT.

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H;. \Vaivers. Old Republic, after being advised by legal counsel, does hereby

voluntarily and knowingly waive any and all rights for procedural requirements, including notice and

an opportunity for a hearing, and review or appeal by any trial or appellate court, which may have

otherwise applied to the Market Conduct Examination #1610-56-TGT.

I. Changes. No changes to this Stipulation shall be effective unless made in writing

and agreed to by representatives of the Division and Old Republic.

J. Governing Law. This Stipulation shall be governed and construed in accordance

with the laws of the State of Missouri.

K. Authority. The signatories below represent, acknowledge and warrant that they are

authorized to sign this Stipulation, on behalf of the Division and Old Republic respectively.

L. Effect of Stipulation. This Stipulation shall not become effective until entry of a

Final Order by the Director of the Department (hereinafter the "Director'') approving this Stipulation.

M. Request for an Order. The signatories below request that the Director issue an

Order approving this Stipulation and ordering the relief agreed to in the Stipulation, and consent to

the issuance of such Order.

DATED: I 120 I ;3011 Angela elson, Director Division of Insurance Market Regulation

DATED: ___.._.I / ___ J ___ o~/1 .............. o I__.]_ Stewart Freilich Senior Regulatory Affairs Counsel

DATED: Ljiif_t1

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